At recent REIN™ Workshops across the country, REIN™ invited Senior Investors to share their insights into real estate investing. In part two of this series, veteran members were asked if they had ever considered giving up the real estate game and packing it all in.
Have you ever considered quitting? Packing it in because it’s just not worth it?
Arlen Dahlin – Arlen has been investing in Alberta for over 17 years and since 1995 he has transacted over 1000 properties. He currently holds 300 properties. Arlen became a real estate millionaire in his thirties and he is an expert in joint venturing.
Absolutely. I considered quitting probably three months into buying my first properties. My first three properties I bought in kind of a group of three. I overpaid, I didn’t buy in the best area, I had already had existing crappy tenants. I didn’t know any better, I just jumped in at got at ‘er. As plenty of you have heard me speak about before, when I started I didn’t have any money, in fact, I didn’t even have my own house. That was joint venture money. I’m very conscientious with other people’s money, more so than I would even be with my own.
Needless to say, early on I had vacancies, I had damage, I had skips, because they weren’t the best properties that I bought. At that time, of course I felt like quitting. I felt like kicking walls, I felt like crying, I felt like pretty much everything, but I didn’t have an option because I had somebody else’s money. I’d like to say I stuck with it because I have goals and I did this and I went to seminars – No, I had no option. That’s the only reason why I didn’t quit. Then, once I got through all that because I didn’t have an option… That’s how you learn, by making mistakes and then of course, I just kept on going, kept on going, kept on going.
The funny thing is, of all the properties I’ve bought, some I’ve sold, I still own tons…I still actually own those three, those terrible deals that I bought that I paid $42,000 a door for and right now, they’re worth over $200,000. So, it’s not so bad.
Denzal Lobo – Denzal is the owner and principal of Properties of Distinction Corporation. He joined REIN in 2002 and has owned over 300 multi-family and single properties in Alberta.
In my case, I’ve had a motto that says “attitude is everything”. I actually started out calling my company Attitude is Everything. I never ever decided to quit. Part of it, like Arlen, I had a lot of joint venture deals that I got started with and I just felt that commitment towards the person had given me the money. I actually got into real estate with no money down at all. I think just the fact that we had received money from other people kept that going for me.
David Dunville – David started investing in 2001. He personally manages over 105 doors. His area of expertise is Whitecourt, Edmonton and Fort McMurray.
I don’t know if I’ve ever made a bad deal… We use the systems to analyze everything that we’re doing. I don’t know, there always probably could be a better deal but…I don’t know if I’ve ever got to the point where I wanted to quit. Some of the joys of managing your own properties are that you have a connection with your tenants, their lives and how you affect them as well, right? If I did think about it, it was just like, “What is the alternative?” If I’m not doing real estate investing, which provides me the freedom to do what I do, where else am I going to go? To a 9 to 5 job? The alternative to what I was doing, there’s nothing really that’s better than investing in real estate for me. I love it. Totally passionate about it. It’s what I was put on the planet to do and it is what I do.
Wade Fenner – In his first year, Wade bought over $1 million of real estate on a bicycle while living in Calgary, in the middle of the winter. He now has purchased over 130 properties.
I didn’t have any choice, I really couldn’t quit because I’m not skilled or trained in anything, I don’t have another profession. I know real estate and construction and that’s it. Especially looking back now… 1997 was my last job job and even that wasn’t a high level, skilled job. I’m unemployable. I got no option, I’ve got to stay.
Yeah, I’ve had challenges. When the market turned, I got done a lot of flipping and a lot of renovation stuff. I made the mistake of having debt partners instead of equity partners on a lot of construction stuff, so when the market turned I was way out on a bad limb. I spent basically the following two years just putting out fires, as opposed to actually making money. The number one thing that drove me was the rule in my mind that I’m not going to lose anybody’s money, just like what Arlen was talking about.
I don’t give a damn about myself, I can sleep in a garage but I’m not going to lose my joint venture partner’s money because with that goes my reputation and that’s all a person has. If you have your reputation, at the end of a bad economic time people will be standing there to give you money again.
The other thing was the summer of 2008, my son was born and that wasn’t a planned thing. So, 2009 when things were pretty much at their worst too, I’m dealing with fatherhood and trying to keep the ship right side up. It was an interesting time.
Domenic Mandato – You think your life would be busy? Domenic is a committed family man and real estate investor. He manages a $42 million real estate portfolio in British Columbia, Alberta, Ontario and Quebec and has been investing for 13 years.
There’s so many times in this business, there are times of desperation in this freakin’ business…If you’re going to get into this business, expect it. Expect that there’s going to be some down times. It’s a rollercoaster ride. That’s probably why most of us are doing this. It’s a very exciting business to be in and there are times… there’s lots of times, I’ve thought about quitting, but of course you do have those obligations to your investors and I think, for me anyways, it’s a question of whether I could do it. A lot of times, even thinking about the possibility of quitting, the biggest fear of quitting is realizing that maybe this isn’t for you. So now you start to question yourself and your ability to actually do that.
I came from working with a very good company for 13 years and shortly after leaving the company in September 2008, so you figure out when that was. It was just perfectly timed with the recession. It was just brilliant, brilliant timing. So shortly after that, 6 months later I’m thinking to myself, “Gosh, I think I’ve made the biggest mistake of my life.” Fortunately though, we did have a bit of a plan. We put some things in place, but just the option of having to go back to that was not there. I had to make this work for me, my family and my investors. The option is there, but I think once you’ve set your mind to it, you’ll always run into those valleys, but stick to the plan and you’ll get through.
There are times when you also think “My gosh, I’m so happy to be here.” What I found, and especially during the downturn, there were times where you feel like you’re pushing a rope. It’s just not working. What’s worked for me is I’ll just let it go. Just let it be. I just take myself away from that issue, because sometimes we get so entrenched in what we’re doing. We’re questioning ourselves and going, “What the heck is wrong with me? Why isn’t my business moving forward? Why did that investor not invest with me?” If you sometimes just let it go, let it be and do something else completely non-related for one or two days, you’d be surprised at how things just start to fall in place. It’s magic, it just happens. It happens for me and it also happens with a few of my other associates and business people that I know. Sometimes, we will get talking and sometimes we’ll talk about situations. “Do you ever feel that sometimes you’re not getting anywhere?” There’s a moment in life where you either start to change direction, or think about the direction, but also maybe even just a step back. A lot of us go through that. I would encourage that with anybody.
Betty-Anne Tarini - Betty-Anne has been actively investing in multi-family properties along with her brother Mark since 2001. She’s been nominated for and won Top Player of the Year in 2006, 2007, 2009, 2010.
Actually, it was a little over a year ago, I had the absolute worst tenant situation combined with a very stressful mortgage situation on the missing property. This went on for several months. The tenant was actually bullying by text all hours of the day and it was really, really hard on me. I just about said, “I don’t need this anymore.” That’s when I asked for help, so we brought on another family member [who] has taken on some of the workload of the tenant management. It frees me up to actually look at the problems as part of my job and sort them out methodically and learn how to deal with them a lot more professionally. Ask for help…Misery loves company!
John Peacock – John started investing in real estate in 1999. He was first encouraged by his children to get involved in real estate. One of his goals is that he wants each of his four children to own investment properties on their own. He has been investing for 25 years and currently owns 25 properties.
It helps immensely to get a good night’s sleep. No, really, seriously. It helps immensely also if you…there’s my wife, my son – we all have to want to quit at the same time and that just never happens. Usually two of us want to stay and they out vote the third. Anyways, think about it. How do you get rid of 20 or 30 properties? “I’m mad and I want to get out…” That’s a long term thing to get rid of that. Sleep helps a lot. Get away and have some perspective.
Mark Healy – Mark started working with his dad in the early 1970s when his dad was buying properties in Calgary. Mark and his family own a portfolio worth $13 million. They started with the original six properties that they bought and they transitioned that into 60 properties.
Quitting was never an option. It’s not your money, so you can’t walk away from it. I do know that the most frustration that I’ve experienced is dealing with joint venture partners, where you’re just pulling your hair out saying, “I want to quit. I don’t want to do this anymore. I’m done, I’m out of here.” Then you realize that you’ve got the responsibility and you’ve got to do it, so then it goes into now why isn’t working, what do you have to do to make it work? Then you focus on that.
Tahani Aburaneh - Tahani is a real estate developer, builder, entrepreneur, and an author of ‘Real Estate Riches’ A Money Making Game Plan for the Canadian Investor. 100% of royalties from sales of her book is donated to help other women around the globe through Care.org.
Absolutely, there were many times where we go, “Oh my gosh what are we doing here?” and you want to quit. The thing that I look at is the hurdles that you have and then you say “What is the opportunity in them?” So if you have that mindset, then everything changes. You say, “What is the gift and what is it that I really need to learn from this situation?” Just about two months ago, I was going to close on one of my developments and I’ve never had any joint venture partners and somebody said “I will give you $250,000.” A week before closing, he backed out. Actually, I backed out because of something that was happening. Again, I thought… I didn’t think “Oh my god, the whole world is going to end I need $250,000 I need to close.” I was actually thinking “Ok, creative… what do I need to do, who do I know, all of these things and that’s when the answer came in and I’m like, “Wow, I did it and I closed and used my own money I didn’t even need anybody else’s money.” It’s just looking at the bright side every time you have a challenge.
It showed up as one of my properties. I had enough equity in one of my properties that I did a line of credit. It wasn’t really that hard, but I didn’t want to do it that way. I wanted to try a joint venture partnership.
Wally Janzen – Wally Janzen is a knowledgeable real estate investor with over 500 doors spread across the Niagara Region, Ontario, and Edmonton, Alberta. He is a private investor and property manager with a 14 year track record of maximizing the potential of residential real estate in order to enhance the living experience of his tenant’s and improve the community they reside in.
Things always go wrong, up and down. I’ve never really wanted to quit. I’ve always had the passion for it ever since I started. The ups and downs don’t necessarily make me want to slow down. Early on, when I first started out I was into flipping houses to make some quick cash. I bought one and then another one came along because it took so long to buy the first one, so I bought the second one and all the sudden, I went “Uh Oh.” I didn’t have any more capital. I wondered how I was going to keep everyone happy here. I’d forgotten I’d applied for a credit card months ago. I went to the post office and the card came in… a $15,000 card, like a real card with a real line of credit attached to it and I thought, “Ok we’re good now, we can get through this.” So, you never know where the money is going to come from, or how you’re going to work it out, but if you trust in yourself and in your abilities and stay focused, it will all happen. It always pans out.
Being in the real estate business, I always say to myself that if I believe in the project that I’m in…at that time, I was into two houses, which I needed to sell immediately. I could always do it and it ended up, I was renting another one of my units and ended up doing a lease-to-own on the house that I needed to get rid of, I got him financing, then I got money and then I sold the next one. So, you get out of it, but you just have to keep looking and keep working with what you have and it will all come together, but if you stop, then obviously not. You have to persevere and continue on and it comes together.
Margaret Cowan – Margaret Cowan has been investing in BC since 1987, and then in Alberta in 1997. She has owned rooming houses, single families, list suites, 4-plexes, 5-plexes, 6-plexes, and now owns an 11 unit apartment building. She has been investing for over 20 years.
I didn’t walk away from real estate, I walked away from acquiring more properties. I reached a point where I was diversified. I had a couple of property management problems, so I wasn’t as grounded as I had been. I got a little emotional. “These are lemons. I think this is just too much stress. I want to keep my three properties that I’ve got and I’m just going to see what else I can do.” Big mistake. I came to my senses back in February 2008. I thought, “Why didn’t I join REIN when Don Campbell said ‘Margaret, we’re here in B.C. with B.C. REIN.’” No, I said “Don, I have other things.” So then, I went back into real estate more actively. Focused on Edmonton (far smoother sailing) and reminded myself that all the returns I’d got on mutual funds and whatever other investments… I had not made a whole bunch of money and I had made, despite some mistakes over the years, very good money in real estate. That’s why I’m mostly invested in real estate.
Thomas Beyer – Thomas bought his first property in 1997 with a $20,000 investment and is now the owner of Prestigious Properties, which, at its peak, owned 1100 properties.
There are a few things. I’m a believer, so I think there’s a universe out there that helps you if you want to call it that. So, I have some faith and that’s helped in the hard times. Imagine if Connie had told Don when he started up 20 years ago that it was kind of risky, you shouldn’t do that and you should be an accountant. If you have a partner who is always negative, guess what? Don wouldn’t be here today, he might be an accountant or an economist with that spouse as a support. I think it’s important that you have a spouse or partner who supports you in your up and down times, especially in the down times because it’s not always rosy.
I come to REIN not every month, but frequently, because it’s a positive environment and it’s motivating. I love to listen to Don. You think of the big picture. Real estate is a great investment. As Margaret mentioned, there’s other stuff I’ve tried. I’ve tried restaurants, I owned a software company, I do options, I do stocks, but none of them have produced sustainable results. Sometimes you get lucky and the stock you buy goes up 20% and the next one you buy goes down 50%, but I’ve made money consistently from real estate over the years.
We have it pretty good here, so it’s good to maybe go somewhere else once in a while and see how people live in South America for a while or the slums of Paris and then you go to East Van and say “Wow, this is paradise.” I think perspective is very useful.
Don Campbell – Don started investing in 1985 with a house purchased in Mission, BC. He is the Founding Partner and Senior Analyst of The Real Estate Investment Network and currently owns over 170 doors in BC and Alberta.
Number one is that at the end of the day, having that personal belief kept me going through this whole thing. I’m telling you, if I didn’t have a really specific lovely picture of what we wanted to create, what Connie and I wanted to create. It changed through the years obviously as we progress, things change, e.g. “I don’t want to live on a beach in Thailand anymore.” Whereas, 20 years ago, that was the thing to do. As you progress, that’s what gets me though.
Also, I am a positive person 99% of the time. I don’t like to sweat the small stuff. I don’t like to get as emotionally involved. I do, believe me, I am nowhere near perfect, but when there’s an issue, let’s just deal with the issue that’s going on in the property. That has helped me get through because sometimes, I’ll tell you, I want to fire every property manager that I’ve ever had. I’ve wanted to burn every building down.
I would never do that, just so you know. The reason I kept with it is because I also have a stock portfolio and all this stuff and it just kind of doesn’t do so good. In real estate you get mortgage pay-down, it’s a business of dirt, it can be incredibly boring, it can be incredibly exciting, but at the end of the day, if you have a goal, you have to make your money work hard. In real estate, you can go away for 6 weeks and come back and your bank account is bigger. That’s a pretty good measure of how it all kind of works, because we all like to travel. We all do.
Brent Roberts – Brent started investing at the age of 18 and has owned properties across North America. He bought properties in the States and then became a realtor. He became the rookie of the year as a realtor. Brent has been a REIN™ member for over 20 years.
Even when I had my first 4-plex at 19 years old, the tenants weren’t paying the rent and you’re chasing after people when you’re 19 years old. You’re finding out that tenants, oddly enough, can be non-paying people and that’s shocking. I thinking, it’s funny about being older, you forget how bad things can get sometimes. That helps, I’ll tell you.
I remember thinking not that many years ago before the real estate market got bad; I thought things are going to get worse. It was getting near the peak and I thought, “Look how fast it had gone up since the Liberals came to town” after watching a decade of just nothing. Death. I remember saying that if real estate was like the stock market, I’d phone up my broker and say to sell everything. I’ll pick up my cheque on Monday. That’s how easy it is to get rid of things. With real estate, you have tenants involved and it’s not that easy to get rid of something that way except for in the stock market. Obviously at some stage in my game, I’ve thought of this many times. It is tough and Don is right. If you have your beliefs and you know what your goals are, but you don’t necessarily know how to get there, you will get there as long as you’re focused.